Donald Trump’s election tapped into the unease facing many blue collar Americans left behind in today’s economy. David Smick, the author of “The Great Equalizer: How Main Street Capitalism Can Create an Economy for Everyone” offers a look at how policymakers can liberate the entrepreneurial American spirit nationwide.
Smick served as U.S. Rep. Jack Kemp’s chief of staff from 1979 through 1984. His book, which has already been praised by Speaker of the House Paul Ryan (R-Wis.), is being promoted in collaboration with the Jack Kemp Foundation.
“Never one to aim low, David Smick is calling for America to reinvent herself through a new innovative era of ‘mass flourishing,’” Ryan wrote. “And even more impressive, he’s written a game plan on how to do it.” The book, Ryan adds, “is chock full of canny insights and bold ideas; it definitely deserves a close read.”
While working for Kemp, Smick helped implement “supply-side” economics, which helped unleash the prosperity of the 1980s and ‘90s. But Smick attributes President Trump’s populism to the crony capitalism and government efforts to pick winners and losers that has supplanted the Reagan era’s free-market ethos.
“Our president can shift people’s expectations about the future to positive goals and actions”
“Our president can shift people’s expectations about the future to positive goals and actions,” Smick writes. “The choice is between being an ideological place hold or becoming a truly transformational president.”
“In a counterintuitive way,” he continues, “today’s public anger and disillusionment over lack of economic opportunity have produced a rare chance to achieve positive change. The public’s message to their Washington policymakers: We are tired of economic mediocrity at home and terrified of a dangerous world. We crave a healthier more robust economy. We don’t care how you get there. Be creative. Be pragmatic. Try different things.”
“The Great Equalizer” offers a 14-point plan designed to level the playing field by offering regulatory and tax reform that ensures fair competition. Smick wants to correct the “Warren Buffett problem” that a wealthy employer could pay less in taxes than his or her secretary.
He also wants Congress to tackle “regressive regulations” that favor large institutions over small community banks and other businesses. A prime example is the Dodd-Frank Act passed in the wake of the financial collapse of 2008. A Harvard study found that while the number of community banks was already declining before the financial crisis, since the second quarter of 2010 — Dodd-Frank’s passage — community banks have lost market share at a rate double what they did between the second quarter of 2006 and the second quarter of 2010. African-American-owned banks have been especially hard hit.
“Government and central bank policy now favors the big, the corporate, and the status quo at the expense of the small, the young, the new, the inventive, and the entrepreneurial”
“Government and central bank policy now favors the big, the corporate, and the status quo at the expense of the small, the young, the new, the inventive, and the entrepreneurial,” Smick writes. “It favors Wall Street over Main Street. Because the economic system is compromised, people can feel it in their bones that their children’s future is being frittered away.”
In response, Smick envisions “a vibrant Main Street Capitalism of mass business startups and bottom-up innovation, all unfolding on a level playing field.”
Smick goes beyond the hard, quantified econometrics so central to past economic debates into jumpstarting what English economist John Maynard Keynes calls “animal spirits,” or the ability and cultural connective tissue supporting risk taking. Smick argues this is what is lacking across the country, not only in Red States, but also in all low-income areas held back by the current system.
“Americans want their leaders to write a new economic narrative,” Smick writes. “They want to rediscover the thing that has always made them exceptional: their can-do attitude and audacious spirit — their willingness to dream big and to dare big. Average working families are desperate for higher rates of economic growth. But the time to write that new story of American economic dynamism is now. The clock is ticking.”
Carrie Sheffield is a senior contributor for Opportunity Lives. You can follow her on Twitter @carriesheffield and on Facebook.